EPC OVERVIEW

stands for Engineering, procurement and construction

EPC overview

EPC is gaining importance worldwide. It requires good understanding by the EPCC to return a profit

An EPC contract is a complex agreement. In a global context, EPC management is more complex.

EPC contract the contractor designs the installation, procures the necessary materials and builds the project, either directly or by subcontracting part of the work. In some cases, the contractor carries the project risk for schedule as well as budget in return for a fixed price, called lump sum or LSTK depending on the agreed scope of work.[1]

When the scope is restricted to engineering and procurement, this is referred to as an EP, E and P or E+P contract. This is often done in situations where the construction risk is too great for the contractor or when the owner does the construction

Comparison of EPC/EPCM

EPC company is able to manage all levels on site, with Construction as well

EPC contract is more critical and destined to the biggest companies - it is advantage indeed.

EPCM company is only managing build site as a Site Engineer (Supervisor on behalf of final customer.

EPCM contract is smaller type of contract than EPC, but safer for EPCM company

EPCM (engineering, procurement, and construction management

EPC (engineering, procurement, and construction )

IMPORTANCE OF EPC

An owner decides for an EPC contract for reasons that include

Reduced stress for owner easy work and growth of the company. Single point of contact for owner simplifies

communications. Ready availability of post-commissioning services Ensures quality and reduces practical issues faced in

other ways[clarification needed]

Owner protected against changing prices for materials, labor, etc.

Cost is known at the start of the project

Owner defines to the EPC contract :

Scope and the specifications of the plant Quality Project duration Cost The cost (the price to be paid to the

EPCC) is negotiated and finalised and paid in mutually agreed installments.

Functions

Engineering Functions

Initiation Planning Estimating ->

Request for Quote Design

Procurement Functions

Purchasing Expediting Receiving Invoicing

Construction Functions

Construction Schedule On-site Material Handling Building Activities On-site Client Communications Closing

Projects Success by the owner and the EPC contractor

Owner Defines Defines guarantees

well Defines scope and

quality very carefully Defines milestones

meticulously Defines LD/penalty

clauses Makes payment

terms very specific

EPC Contractor improves Adopts similar terms

and conditions as owner regarding quality, guarantee etc., for subcontracts/vendors

Do not keep terms open-ended

Coordinate vigilantly to reduce chances of errors at site.

Global arena

The EPCC must have data and expertise in all the required fields. Some important areas are

Local market conditions for materials and labour availability and capabilities

Local code, statutory etc., requirements

Availability of local supervisory personnel

Availability of local engineering services

Local and global subcontractor experience and performance

Cost Certainity & Owner Responsiblity

Cost certainty One main reason an owner may

prefer an EPC arrangement is "certainty of cost". An EPC contract binds the Contractor to deliver the project at a firm, predetermined price regardless of any increase in costs that the Contractor may incur after the contract is signed. However, changes to specifications initiated by the owner (better finishes for example) may be incorporated through a "change order". Here, the owner and the Contractor negotiate the price to make the changes and these changes/prices are recorded in the change order document

Owner responsibility To ensure quality, the

owner must select an experienced EPC contractor. A third-party or in-house consultant can verify the design of major structures and inspect the main equipment installations.

Changes in scope of work can affect project schedule, cost and risk. Such changes are the responsibility of the owner

EPC PROJECTS OVERVIEW

Oil & energy projects

Oil and Gas Project Categories

Carbon Capture and Storage Facilties (11) Offshore Field Development (Drilling-Subsea) (4

38) Offshore Production Facilities (127) Offshore Storage Facilities (1) Onshore Field Development (Drilling) (146) Onshore Production Facilities (112) Onshore Storage Facilities (7) Petrochemical and Chemical Refineries (128) Pipelines (57) Terminals (51)

Power and Energy Project Categories

Biomass/Energy Recovery Facilities (12) Carbon Capture and Storage Facilities (17) Coal-Fired Power Plants (75) Electrical Transmission and Distribution (21) Gas-Fired Power Plants (81) Geothermal Power Plants (4) Hydro Electric Power Plants (32) Nuclear Power Plants (127) Solar Power Plants (34) Wind Power (102)

Projects types

Alumina Refinery (3) Boiling Water Reactor

(BWR) (7) Coal Export Terminal (

1) Coal Seam Gas (2) Concentrators (2) Condeep (2) Condensate Field (9) Crude Oil Terminals (4

) Drill Rig (11) Drill Ship (1) Fertilizer Plants (1)

FPSO - Floating Production, Storage and Offloading (25)

LNG Terminal (13) Nickel Refinery (3)

FSO - Floating Storage and Offloading (4)

Gas Compression (1) Gas Field (73) Gas Processing (6) Gas To Liquids (GTL) Plants

(1) Heavy Lift Vessel (0) Jack Up Rigs (1) Jackets (9)

Projects Types

Offshore Wind Farms (11) Oil Field (99) Oil Refinery (59) Oil Sands (12) Onshore Wind Farms (13) Open Pit Mine (55) Photovoltaic (12) Pipelay Vessel (5) Pressurised

Water Reactor (PWR) (10) Semi-Submersible (13) Shale Oil and Gas (2 Slurry Pipeline (0)

Solar Thermal (6) Solar Thermal - Dish and Sterli

ng (1) Solar Thermal - Fresnel (0) Solar Thermal - Parabolic (5) Solar Thermal - Tower (3) Solids Handling Facilities (1) Steel Plants (1) SURF Systems (6) Tailings (1) Tension Leg Platform (TLP) (6) Underground Mine (29)